Financing a Start-up: 101 vs.

• My Background • Comments on the Stages Up to Series A

• 14 rounds of capital, and counting • Bi-coastal • MapQuest, Netignite?, Jabber, Local Matters, Closely

Before You Assume a Position
• Lifestyle business versus investor-supportable idea? • Great ideas and even great companies are not often fundable
– – – – – – Addressable Market Size/Scale Growth, Growth, Growth Scalability of Profit Margins Defensibility of Position Ability to Have/Attract Leadership Team Willingness to Pursue “unhedged”

Stage one: Friends and Family
• • Don’t use either Visa and Ramen Noodles
– – – – Test, refine, prove your commitment Give your right <> for a customer Give your left one for a strategic advisor Decide if you’re ready to walk the walk

Powerpoint & biz plan documents are NOT ready to be funded
– Think prototypes, customers, validating market evidence, teams in formation…

Angel Funding
• Formulate the minimum core team • Refine the product/business concept
– Build prototype or beta product – MVP / Lean Start-up doctrine – Validating market research/evidence

• Seriously refine your elevator pitch
– Script what the VC says when the other partner asks “what do they do?”

• Get to/Understand Plan B • De-risk the investment profile

Lucifer, B.V.C.

The rise of the Super Angel
• Major Silicon Valley VC trend • Active/pro-Angels have been organizing and attracting limited partners
– Ron Conway, Chris Sacca, Freestyle Capital, Dave Mclure – $25K to $1M range (and growing?) – Fast close and syndication – Earlier bets than Series A conventional wisdom

• Seed funds and Super-angels are morphing into one
– Often more contemporary and deeply networked capital – More entrepreneur friendly, on the surface

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